CHENNAI: With the price cut of Rs 3 per litre of Aavin milk announced by the State government coming into force from Sunday, the State-owned Co-operative Milk Producers' Federation has decided to meet the additional expenses by increasing the sales of milk and milk products.
Aavin's market share is merely 17 per cent with daily sales of 25 lakh litres. About 10 to 11 lakh litres of milk are converted into milk products.
From Sunday, when the revised price of Aavin milk comes into effect, the organisation will suffer a loss of Rs 75 lakh per day, thereby registering an annual loss of Rs 265 crore.
The price of Aavin milk was last increased by Rs 6 per litre in August 2019 when the procurement price was hiked by Rs 4 a litre. With the State government not announcing any compensation yet, Aavin has begun exploring options to meet its financial burden.
On Friday, a high-level meeting chaired by Milk and Dairy Development Minister SM Nasar was held at the headquarters in Nandhanam, in which it was decided to increase the market share of Aavin milk and products.
The minister also assured that milk procurement prices will not be reduced and asked officials to release the pending dues to district co-operative unions.
Nasar asked the officials to prepare detailed plans to expand the Aavin’s milk network across the State. Official sources pointed out that establishing new milk processing dairies may take at least two years.
"The entire existing infrastructure - milk dairies at Ambattur, Madhvaram, Sholinganallur and Kakkalur are being utilised to over 90 per cent. The feeder balancing dairies at Madurai, Erode, Salem, Krishnagiri and Thiruvannamalai, used for producing milk products, are also utilised at optimum level," said a senior official.
However, the official added that Aavin’s share in the dairy market can be expanded gradually.